20018 Federal Register / Vol. 72, No. 76 / Friday, April 20, 2007 / Rules and Regulations 

DEPARTMENT OF HOUSING AND 

URBAN DEVELOPMENT 

24 CFR Part 1000 

[Docket No. FR–4938–F–03] 

RIN 2577–AC57 

Native American Housing Assistance 

and Self-Determination Act 

(NAHASDA); Revisions to the Indian 

Housing Block Grant Program Formula 

AGENCY: Office of the Assistant 

Secretary for Public and Indian 

Housing, HUD. 

ACTION: Final rule. 

SUMMARY: This final rule makes several 

revisions to the regulations for the 

Indian Housing Block Grant (IHBG) 

program allocation formula. Through 

the IHBG program, HUD provides 

federal housing assistance to Indian 

tribes in a manner that recognizes the 

right of Indian self-determination and 

tribal self-government. This final rule 

follows publication of a February 25, 

2005, proposed rule and takes into 

consideration the public comments 

received on the proposed rule. Other 

than one conforming change, this final 

rule adopts the February 25, 2005, 

proposed rule without change. HUD 

negotiated the proposed rule and final 

rule with active tribal participation and 

using the procedures of the Negotiated 

Rulemaking Act of 1990. 

DATES: Effective Date. May 21, 2007. 

FOR FURTHER INFORMATION CONTACT: 

Rodger J. Boyd, Deputy Assistant 

Secretary for Native American 

Programs, Office of Public and Indian 

Housing, Department of Housing and 

Urban Development, 451 Seventh Street, 

SW., Room 4126, Washington, DC 

20410–5000; telephone (202) 401–7914 

(this is not a toll-free number). Hearingor speech-impaired individuals may 

access this number via TTY by calling 

the toll-free Federal Information Relay 

Service at (800) 877–8339. 

SUPPLEMENTARY INFORMATION: 

I. Background 

On February 25, 2005, HUD published 

a proposed rule (70 FR 9490) to revise 

the regulations for the Indian Housing 

Block Grant (IHBG) program allocation 

formula. The IHBG program is 

authorized by the Native American 

Housing Assistance and SelfDetermination Act of 1996 (25 U.S.C. 

4101 et seq.) (NAHASDA), which 

changed the way that housing assistance 

is provided to Native Americans. 

NAHASDA eliminated several separate 

assistance programs and replaced them 

with a single block grant program. 

NAHASDA and its implementing 

regulations at 24 CFR part 1000 

recognize tribal self-determination and 

self-governance while establishing 

reasonable standards of accountability. 

The part 1000 regulations were 

developed with active tribal 

participation using the procedures of 

the Negotiated Rulemaking Act of 1990 

(5 U.S.C. 561–570). 

Under the IHBG program, HUD makes 

assistance available to eligible Indian 

tribes for affordable housing activities. 

The amount of assistance made 

available to each Indian tribe is 

determined in accordance with the 

allocation formula that was developed 

as part of the NAHASDA negotiated 

rulemaking process (IHBG Formula). A 

regulatory description of the IHBG 

Formula is located in subpart D of 24 

CFR part 1000 (§§ 1000.301–1000.340). 

The current IHBG Formula consists of 

two components: Need and Formula 

Current Assisted Stock (FCAS). 

Generally, the amount of annual 

funding for an Indian tribe is the sum 

of the Need component (subject to a 

minimum funding amount authorized 

by § 1000.328) and the FCAS 

component. Based on the amount of 

funding appropriated annually for the 

IHBG program, HUD calculates the 

annual grant for each Indian tribe and 

provides this information to the Indian 

tribes. An Indian Housing Plan (IHP) for 

the Indian tribe is then submitted to 

HUD. If the IHP is found to be in 

compliance with statutory and 

regulatory requirements, the grant is 

made. 

Section 1000.306 of the IHBG program 

regulations provides that the IHBG 

Formula shall be reviewed within 5 

years after issuance. Accordingly, HUD 

established the IHBG Formula 

Negotiated Rulemaking Committee 

(Committee) for the purposes of 

reviewing the regulations at 24 CFR part 

1000, subpart D, and negotiating 

recommendations for a possible 

proposed rule modifying the IHBG 

Formula. The Committee membership 

consisted of 24 elected officers of tribal 

governments (or authorized designees of 

those tribal governments). The 

Committee membership reflected a 

balanced representation of Indian tribes, 

both geographically and based on size. 

In addition to the tribal members, there 

were two HUD representatives on the 

Committee. The first meeting of the 

Committee took place in April 2003 and 

the Committee continued to meet 

thereafter on approximately a monthly 

basis. The Committee met a total of 

seven times to negotiate the proposed 

rule, with the final meeting being held 

in January 2004. All of the Committee 

sessions were announced in the Federal 

Register and were open to the public, 

and interested members of the public 

actively participated in the workgroup 

sessions. The February 25, 2005, 

proposed rule reflected the consensus 

decisions reached by the Committee 

during the negotiated rulemaking 

process on the best way to address 

certain areas of the IHBG Formula that 

the Committee determined required 

clarification, were outdated, or were not 

operating as intended by the original 

Negotiated Rulemaking Committee. The 

preamble to the February 25, 2005, 

proposed rule provides additional 

details regarding the proposed 

regulatory changes to the IHBG 

Formula, and the negotiated rulemaking 

process used to develop the proposed 

changes. 

II. This Final Rule; Conforming Change 

to the February 25, 2005, Proposed Rule 

This final rule follows publication of 

the February 25, 2005, proposed rule 

and takes into consideration the public 

comments received on the proposed 

rule. The public comment period on the 

proposed rule closed on April 26, 2005. 

HUD received 49 public comments from 

Indian tribes on the proposed rule. The 

Committee met on January 31 through 

February 1, 2006, to review and 

consider responses to the public 

comments. A drafting workgroup was 

charged with developing the preamble 

to this final rule. The membership of the 

workgroup consisted of HUD and tribal 

representatives. The 2-day meeting, 

which was open to the public, was 

announced in the Federal Register 

through a notice published on January 

13, 2006 (71 FR 2176). 

Conforming changes to appendices A 

and B were required based on the 

regulatory changes adopted by the 

Committee in this final rule. Therefore, 

these conforming changes to appendices 

A and B are adopted in this final rule. 

No other changes are made to the 

appendices. 

After careful consideration of the 

comments, the Committee reached 

consensus on making a conforming 

typographical change to § 1000.316(a)(2) 

and (a)(3). Other than these conforming 

changes (which are discussed below in 

this preamble), the regulatory revisions 

that were proposed in the February 25, 

2005, proposed rule are unchanged in 

this final rule. 

III. Discussion of Public Comments on 

the February 25, 2005, Proposed Rule 

This section of the preamble presents 

a summary of the significant issues 

raised by the public commenters on the 

February 25, 2005, proposed rule and 


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the Committee’s responses to these 

comments. For the convenience of 

readers, the discussion of the public 

comments is organized into three 

sections. The first section discusses the 

general comments that were received on 

the proposed rule. The second section 

discusses the public comments received 

on specific proposed regulatory changes 

contained in the proposed rule. The 

third section discusses the public 

comments received on non-consensus 

issues (i.e., those issues on which the 

Committee could not reach agreement 

on proposed regulatory language). 

A. General Comments 

Comment. Twenty-eight commenters 

praised the IHBG Formula negotiated 

rulemaking process and offered support 

that all revisions to NAHASDA 

regulations be developed using 

negotiated rulemaking. Further, these 

commenters requested that all public 

comments be considered by the 

Committee in a face-to-face meeting 

before HUD develops the final rule. 

Response: The Committee appreciates 

the commenters’ support for the 

negotiated rulemaking process and for 

the Committee’s efforts. As noted above, 

this Committee met during January 31 

through February 1, 2006, to consider 

the public comments and develop this 

final rule. 

B. Comments on Specific Proposed 

Regulatory Changes 

Comment regarding the revised 

definition of Formula Area. The 

February 25, 2005, rule proposed to 

revise the definition of the term 

‘‘Formula Area’’ located in § 1000.302. 

Many comments were received on 

various aspects of this revised 

definition. For example, five 

commenters objected to the inclusion of 

Oklahoma Tribal Statistical Areas 

(OTSAs), as defined by the U.S. Census, 

in the list of acceptable formula areas. 

The commenters wrote that the 

inclusion of OTSAs as formula areas 

will ‘‘shift funding from Reservation 

restricted trust lands to Fee Simple State 

lands.’’ Other commenters suggested 

that the rule be revised to remove Tribal 

Designated Statistical Areas (TDSAs) 

from the list of formula areas. These 

commenters recommended that the final 

rule should instead use the listing of 

federally recognized tribes published by 

the Department of Interior. 

Response: The final rule has not been 

revised in response to these comments. 

The Committee continues to believe that 

the proposed changes to the definition 

of Formula Area help to clarify the 

current definition and better address the 

different types of geographic areas 

served by Indian tribes. In response to 

the comments objecting to the inclusion 

of OTSAs, the Committee does not agree 

that the inclusion of such areas will 

necessarily result in a shift in funding 

and notes that the final rule continues 

to provide for challenges to the 

‘‘grandfathering’’ of the current formula 

areas for such tribal areas in Oklahoma. 

Additionally, geographic areas 

encompassed by OTSAs are not new to 

the formula, but rather reflect a change 

in terminology used by the Census 

Bureau. These geographic areas were 

previously referred to as Tribal 

Jurisdictional Statistical Areas and have 

historically been included in the IHBG 

formula. With regard to the commenters 

recommending the use of the list of 

federally recognized tribes, some 

federally recognized tribes do not have 

a reservation or trust land. Additionally, 

five state recognized tribes have been 

grandfathered into the IHBG program by 

statute. As noted above, the inclusion of 

TDSAs simply provides Indian tribes 

with another Formula Area option that 

may better reflect the geographic areas 

they serve. 

Comments regarding the definition of 

Alaska Formula Area. Several 

commenters raised concerns about the 

proposed definition of Alaska Formula 

Area. Some of these commenters were 

concerned about the procedures 

contained in the definition for crediting 

Alaska needs data. One of these 

commenters wrote that NAHASDA does 

not authorize HUD to grant IHBG funds 

to ‘‘Alaska Native Villages,’’ only to 

sovereign Indian or Alaska Native tribes, 

and suggested that the definition be 

revised accordingly. Some of the 

commenters raised concern about the 

provision for expanding Alaska Formula 

Areas. Several of these commenters 

objected to the perceived ‘‘ability of any 

corporation to be able to expand their 

service or formula areas.’’ Another 

commenter, however, requested that the 

final rule clarify the ability of Alaska 

Indian tribes to expand their Formula 

Area. 

Response: The rule has not been 

revised in response to these comments. 

The regulatory provision regarding 

Alaska Formula Areas addresses the 

unique circumstances of Indian tribes in 

Alaska, and is consistent with the 

statutory requirements of NAHASDA. 

The language regarding the crediting of 

formula data is identical to that found 

in § 1000.327 of the current regulations. 

The change proposed by the February 

25, 2005, rule was simply to transfer 

this language to the definition of 

Formula Area for purposes of clarity. 

With regard to the expansion of Alaska 

Formula Areas, the proposed and final 

rules make clear that Alaska tribes may 

seek to expand their Formula Areas in 

the same manner as any other Indian 

tribe. Alaska Native Villages have been 

listed and are recognized as ‘‘federally 

recognized Indian tribes’’ by the 

Secretary of Interior (70 FR 71194). 

Additionally, NAHASDA defines Alaska 

Native Villages, regional corporations, 

and village corporations as Indian 

tribes, expressly making them eligible 

for provisions under the statute. 

Comments on the population cap 

used to determine formula area. Several 

commenters wrote in support of the 

continued use of the ‘‘cap’’ on the 

population data that will be attributed 

to an Indian tribe within its Formula 

Area. In particular, the commenters 

supported the clarification that for staterecognized tribes the population data 

and formula allocation shall be limited 

to tribal enrollment figures reflecting 

tribal enrollment criteria in effect in 

1996. The commenters wrote that the 

cap must be enforced to prohibit state 

recognized tribes from being credited 

with any new members. 

Response: The Committee agrees that 

the cap is necessary to maintain fairness 

for all Indian tribes. As explained in the 

preamble to the February 25, 2005, 

proposed rule, the provision regarding 

state-recognized Indian tribes is 

statutorily based. The definition of staterecognized tribe in section 4(12)(C)(ii) of 

NAHASDA requires that the allocation 

for such a tribe shall be determined 

based on tribal membership eligibility 

criteria in existence on the date of 

enactment (October 26, 1996). The 

language of the proposed rule (and 

adopted by this final rule) helps to 

ensure that state-recognized tribes will 

not be credited for any new members 

who do not meet the 1996 enrollment 

criteria. However, the rule does not 

prohibit a state-recognized Indian tribe 

from being credited with new members 

who meet the enrollment criteria in 

place in 1996 and it does not freeze a 

state-recognized Indian tribe’s 

population data or formula allocation at 

1996 levels. 

Comments regarding the expansion 

and redefinition of Formula Area. The 

proposed rule described new 

procedures governing the expansion or 

re-definition of an Indian tribe’s 

Formula Area. One tribe objected to 

reducing the new area to the ‘‘smallest 

U.S. Census unit or units’’ when there 

are other reasonable boundaries that can 

be followed, such as municipal or tribal 

boundaries. 

Response: The rule has not been 

revised in response to this comment. 

The new requirements were carefully 

crafted by the Committee to ensure that 


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an Indian tribe seeking to include 

additional geography within its 

approved Formula Area has the 

authority to provide housing services 

within the new geography and will 

serve the housing needs of Native 

Americans within the expanded 

Formula Area. The provision noted by 

the commenter is consistent with these 

goals because it limits expansion to 

those U.S. Census units for which the 

tribe can verify that it has the requisite 

legal authority and the ability to provide 

housing services. Despite differing 

views on its limitations, the Committee 

decided to base the limitation on U.S. 

Census data because such data is 

uniformly collected and accessible to all 

Indian tribes and because no acceptable 

alternative source has yet been 

developed and agreed upon. 

Comments regarding the definition of 

Substantial Housing Services. Among 

the required criteria for expanding its 

Formula Area, the Indian tribe must 

demonstrate that it is providing 

‘‘substantial housing services’’ (as 

defined in the rule) within the new 

geographic area. Several of the 

commenters objected to the requirement 

that the tribe demonstrate affordable 

housing activities equal to at least 100 

percent of the increase in its IHBG 

Formula allocation or 51 percent of the 

tribe’s current formula allocation. The 

commenters wrote that this requirement 

establishes an excessively high and 

difficult threshold for expansion. 

Several commenters wrote that the 

definition would make it especially 

difficult for small tribes in California 

and Nevada, whose IHBG Formula 

allocation is based largely on the FCAS 

component needed for maintaining 

current housing stock, to include 

locations outside their existing Formula 

Areas even if they provide housing 

services to their enrolled members in 

those areas. 

Response: The rule has not been 

revised in response to these comments. 

As noted above in this preamble, the 

new requirements regarding the 

expansion of Formula Area were 

carefully crafted by the Committee. The 

definition of substantial housing 

services intentionally contains 

thresholds that are designed to ensure 

that an Indian tribe seeking to include 

additional geography within its 

approved Formula Area has the 

authority to provide housing services 

within the new geography and will 

serve the housing needs of Native 

Americans within the expanded 

Formula Area. However, the definition 

also contains the necessary flexibility to 

help address geographic and other 

differences among Indian tribes. 

Specifically, the rule permits Indian 

tribes to satisfy the substantial housing 

services requirements in one of two 

ways: to either provide 100 percent of 

the increase in its IHBG Formula 

allocation or 51 percent of the tribe’s 

current formula allocation if certain 

other conditions are satisfied. 

Comments regarding the use of U.S. 

Census data in overlapping Formula 

Areas. Current regulations at § 1000.326 

specify how IHBG funds will be 

allocated where the Formula Areas of 

one or more tribes overlap. Among other 

factors, the allocation will be based 

upon the Indian tribe’s proportional 

share of the population in the 

geographic area. Tribal membership in 

the geographic area (not including 

dually enrolled tribal members) will be 

based on data that all Indian tribes 

involved agree to use. The current 

regulation lists several suggested data 

sources, including tribal enrollment 

lists, Indian Health Service User Data, 

and Bureau of Indian Affairs data. This 

list is not exclusive, and the data used 

for this purpose has sometimes included 

U.S. Census data. For purposes of 

clarity, the proposed rule expanded the 

list of suggested data sources to 

explicitly include data from the U.S. 

Census. Five commenters objected to 

the use of Census data, suggesting that 

HUD instead utilize official enrollment 

data from the tribe. 

Response: The change clarifies that 

the U.S. Census data is one of several 

data sources that may be used to 

determine tribal population. The 

Committee notes that the regulation 

does not require the use of Census data 

and does not preclude the use of other 

data, including the tribal enrollment 

figures recommended by the 

commenters. Accordingly, the 

Committee determined that a change to 

the rule was not necessary. 

Comments regarding the required use 

of the Formula Response Form for 

reporting changes to FCAS. The 

February 25, 2005, rule proposed to add 

a new § 1000.315 and § 1000.319, both 

clarifying policies and procedures 

relating to the reporting of changes to 

FCAS. New § 1000.315 clarifies that the 

Formula Response Form is the only 

mechanism a recipient may use to 

report changes to the FCAS. New 

§ 1000.319 provides that if a recipient 

receives an overpayment of funds 

because it failed to report changes on 

the Formula Response Form in a timely 

manner, the recipient must repay the 

funds within 5 fiscal years. Conversely, 

HUD has agreed to provide back funding 

for any undercount of units that 

occurred and was reported or 

challenged prior to October 30, 2003. In 

their comments, 34 tribes offered 

support for these rule changes. The 

commenters supported the change on 

over- and under-counting of FCAS, as 

well as the formula response form 

change at § 1000.319. 

Response: The Committee appreciates 

the support of the comments. The final 

rule adopts the provisions of proposed 

§§ 1000.315 and 1000.319 without 

change. 

Comments regarding the calculation 

of the operating subsidy component of 

FCAS. For clarity, the February 25, 

2005, rule proposed to make a minor, 

non-substantive modification to 

§ 1000.316(a)(1). The current language 

of the regulation provides that the first 

of the three variables comprising the 

operating subsidy component of FCAS 

is ‘‘the number of low-rent FCAS units 

multiplied by the FY 1996 national per 

unit subsidy (adjusted to full funding 

level) multiplied by an adjustment 

factor for inflation.’’ The proposed 

provision would simplify this provision 

by establishing a separate definition of 

the term ‘‘national per unit subsidy’’ in 

§ 1000.302, which contains the 

definitions applicable to the IHBG 

program. 

Twenty-eight commenters wrote in 

support of the change. However, one of 

the commenters identified a 

typographical inconsistency between 

§ 1000.316(a)(1) and paragraphs (a)(2) 

and (a)(3) of § 1000.316. Specifically, 

the proposed rule inadvertently failed to 

include the same changes to paragraphs 

(a)(2) and (a)(3) as were proposed for 

paragraph (a)(1). The commenter 

requested that the final rule correct this 

error. Two other commenters submitted 

comments related to § 1000.316, but that 

were outside the scope of the proposed 

rule and therefore not appropriate for 

inclusion at this final rule stage. 

Specifically, one commenter advocated 

the participation of all Indian tribes in 

the Section 8 voucher program, while 

the other commenter advocated for 

increased IHBG funding. 

Response: The Committee appreciates 

the support expressed by the 

commenters on the clarifying change. 

As noted above in this preamble, the 

final rule makes the necessary 

correction to paragraphs (a)(2) and (a)(3) 

of § 1000.316. 

Comments regarding the FCAS 

modernization allocation for small 

Indian tribes. The February 25, 2005, 

rule proposed to implement a statutory 

amendment to NAHASDA by making 

various conforming changes to the IHBG 

regulations. Section 1003(g) of the 

Omnibus Indian Advancement Act 

(Pub. L. 106–568, approved December 

27, 2000) added a new subsection 


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302(d)(1)(B) to NAHASDA regarding 

operating and modernization funding 

for Indian tribes with Indian Housing 

Authorities (IHAs) that owned or 

operated fewer than 250 units 

developed under the United States 

Housing Act of 1937 (42 U.S.C. 1437 et 

seq.) (1937 Act). The proposed rule 

contained conforming changes to 

§ 1000.316 and § 1000.340 to codify this 

statutory requirement. 

Twenty-nine commenters offered 

support for the proposed regulatory 

changes to accommodate the statutory 

amendment to NAHASDA regarding 

operating and modernization funding 

for tribes that owned or operated fewer 

than 250 units. Five commenters, 

although acknowledging that the 

regulatory changes were statutorily 

based, wrote that the statutory 

amendment is unfair to those tribes that 

did not receive the one-time competitive 

modernization grant in 1997. One 

commenter requested clarification 

regarding the effect of the regulatory 

change for Indian tribes that had more 

than 250 units on October 1, 1997. 

Response: The rule has not been 

revised in response to these comments. 

As the commenters acknowledged, the 

regulatory change conforms the IHBG 

regulations to the statutory language of 

section 302(d)(1)(B) of NAHASDA. In 

response to the commenter requesting 

additional clarification, the statutory 

change does not affect the calculation of 

operating and modernization funding 

for Indian tribes that had more than 250 

units on October 1, 1997. 

Comments regarding small programs/ 

minimum funding. The February 25, 

2005, rule proposed numerous revisions 

to the minimum funding provisions at 

§ 1000.328. Among other changes, the 

rule proposed to remove the current 

provisions regarding the minimum 

IHBG Formula Need allocation for an 

Indian tribe in its first year of 

participation in the IHBG program. The 

rule also proposed to revise the 

minimum formula allocation an Indian 

tribe will receive under the Need 

component of the IHBG Formula after 

its first year of participation in the 

program. The February 25, 2005, 

proposed rule also proposed new 

eligibility requirements for minimum 

funding. 

Thirty-four comments offered support 

for the revised minimum funding 

provisions, and 28 of these commenters 

recommended that the provisions be 

adopted without change. Five 

commenters wrote that the minimum 

funding provisions will not provide 

small tribes with adequate funds to 

meaningfully address their housing 

needs. These commenters recommended 

that FCAS should not be considered in 

providing minimum funding, as these 

funds go toward maintenance of existing 

housing and do not address the unmet 

need for housing assistance. These 

commenters also objected to the 

requirement that the Indian tribe 

demonstrate a need for the minimum 

funding, writing that this requirement is 

unnecessary and duplicative because 

each tribe’s IHP already contains a 

statement of needs. 

Response: The rule has not been 

revised in response to these comments. 

As noted in the preamble to the 

proposed rule, the minimum funding 

provision provides for a minimum 

needs allocation of $50,000 based on 

current IHBG appropriations. The 

Committee continues to believe that this 

provision is fair to all Indian tribes 

while helping to ensure an adequate 

minimum level of funding for smaller 

tribes. With regard to the eligibility 

requirements, the Committee concluded 

they are necessary to ensure that the 

minimum funding provisions benefit 

Indian tribes that would otherwise be 

unable to provide even minimal housing 

services and that have a demonstrated 

need for such services. The requirement 

is not duplicative because tribes will 

demonstrate the presence of any 

households at or below 80 percent of 

median income only in the IHP. 

Comments regarding the adjustment 

of the Need variables using birth and 

death rate data. Section 1000.330 

describes the data sources used for the 

Need component. The February 25, 

2005, rule proposed to revise this 

section to codify existing procedures by 

specifying that the data for the Need 

variables shall be adjusted annually 

beginning the year after the Need data 

is collected, using Indian Health Service 

projections based upon birth and death 

rate data as provided by the National 

Center for Health Statistics. 

Twenty-eight commenters wrote in 

support of the consensus position on 

birth and death rates. Five commenters 

wrote that, while death and birth rates 

are a fair method to adjust the Need 

component, it should be the 

responsibility of the tribes to report 

annual enrollment certification instead 

of HUD. 

Response: The birth and death rate 

provision has been adopted without 

change. As noted, the regulatory change 

codifies an existing procedure that both 

Indian tribes and HUD have determined 

works effectively and fairly in adjusting 

the Formula Need component for birth 

and death rates. Procedures at 

§ 1000.336 have also been revised to 

include challenges of birth and death 

rate data used in computing Indian 

Health Service projections. 

Comments regarding data challenges 

and appeals of HUD formula 

determinations. The September 25, 

2005, rule proposed to clarify and 

elaborate upon existing § 1000.336, 

which describes the procedures that an 

Indian tribe, tribally designated housing 

entities (TDHE), and HUD may use to 

challenge data. Under the proposed 

rule, § 1000.336 would continue to 

authorize data challenges, but also 

provide for appeal of certain HUD 

formula determinations. Thirty-four 

commenters wrote in support of the 

proposed rule provisions regarding data 

challenges and appeals. However, five 

commenters objected to the use of U.S. 

Census data to determine need. 

Response: The consensus position as 

described in the proposed rule remains 

unchanged in the final rule. The 

Committee appreciates the support 

expressed by the majority of comments 

on this provision, and believes that the 

new regulatory language will assist both 

tribes and HUD by clarifying the 

policies and procedures for challenging 

data and appealing formula 

determinations. 

C. Comments Regarding Nonconsensus 

Items 

Comments regarding formula median 

income. During negotiations, the 

Committee considered removing the 

definition of ‘‘formula median income’’

used in calculating the Need component 

of the IHBG Formula and, in its place, 

using the definition of ‘‘median 

income’’ provided under section 4 of 

NAHASDA. The Committee was unable 

to reach consensus on this issue and 

therefore a regulatory change was not 

contained in the February 25, 2005, 

proposed rule. 

A majority of commenters requested 

that the Committee revisit the issue. 

Twenty-nine commenters explained that 

there was not enough time to properly 

address the issue during the 

negotiations. They wrote that the use of 

two separate definitions of median 

income (one for the formula and the 

other for use elsewhere in the IHBG 

regulations) was confusing and 

contradictory to the intent of 

NAHASDA. The commenters also wrote 

that the formula definition unfairly 

results in some Indian tribes not 

receiving IHBG funding for low-income 

Indian families who must be served by 

the tribe. 

Response: No change has been made 

to the rule in response to these 

comments. As noted above and 

discussed in detail in the preamble to 

the proposed rule, the Committee could 


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not reach consensus on whether to 

revise the definition of formula median 

income. Because decision-making 

during the negotiated rulemaking 

process was based on consensus, the 

absence of consensus on formula 

median income, even after full 

consideration of public comments, 

precluded the Committee from adopting 

the changes proposed by the 

commenters. Moreover, such a revision 

would not have been appropriate at this 

final rule stage, as it would require 

additional notice and public comment. 

Comments regarding the Section 8 

inflation factor. During negotiations on 

the proposed rule, the Committee 

considered various proposals to remove 

the inflation adjustment factor for 

Section 8 units in calculating FCAS, but 

was unable to reach consensus on a 

regulatory change. There were several 

comments received that made 

suggestions outside the scope of the 

proposed rule. Specifically, five 

commenters suggested that the 

regulations be revised to provide that as 

an individual Section 8 voucher expires, 

the associated funding be placed in a 

‘‘pot’’ in the same way as other FCAS 

are conveyed. One commenter raised an 

objection to the statutory language of 

section 502(a) of NAHASDA, which, 

according to the commenter, effectively 

includes Section 8 assistance to be 

treated as FCAS. 

Response: The rule has not been 

revised in response to these comments. 

This was an item on which the 

Committee was unable to reach 

consensus. Further, the change 

recommended by the commenters could 

not be made at this final rule stage 

without additional notice and comment 

rulemaking. The comment objecting to 

section 502(a) of NAHASDA pertains to 

statutory language that may be revised 

only through legislative amendment. 

Comments regarding substantial 

noncompliance. Section 1000.534 of the 

IHBG program regulations describes 

those tribal actions that constitute 

substantial noncompliance with IHBG 

program requirements. As explained in 

§ 1000.538, HUD may take certain 

actions against an Indian tribe that has 

failed to comply substantially with the 

IHBG program requirements, but only 

after reasonable notice and opportunity 

for a hearing conducted in accordance 

with 24 CFR part 24. The Committee 

considered expanding the actions 

deemed to constitute substantial 

noncompliance and, therefore, entitle 

the Indian tribe to a formal hearing prior 

to any reduction or adjustment of its 

IHBG grant. During negotiations, there 

were two objections to the proposed 

expansion of substantial noncompliance 

and, therefore, consensus was not 

reached on this proposal. Several 

commenters expressed concern on the 

failure of the Committee to find 

consensus on the proposal to amend 

§§ 1000.534 and 1000.538. 

Response: No change has been made 

to the rule in response to these 

comments. As noted above, the 

Committee could not reach consensus 

on whether to revise the regulatory 

provisions concerning substantial 

noncompliance. Because the negotiated 

rulemaking process required consensus 

and because consensus was not reached 

on this item, the Committee did not 

adopt the changes recommended by the 

commenters. Moreover, such revisions 

would not be appropriate at this final 

rule stage because they would require 

additional notice and opportunity for 

public comment. 

Comments regarding the replacement 

of the Allowable Expense Level (AEL). 

The IHBG Formula currently uses an 

adjustment factor known as the 

Allowable Expense Level (AEL), which 

serves as a substitute measurement of 

geographic and other differences in the 

monthly per-unit operating costs 

incurred by an Indian tribe to operate 

Current Assisted Stock. During 

negotiations, some members of the 

Committee expressed dissatisfaction 

with the AEL, stating that it is not 

reflective of the true costs of operating 

affordable housing units and that 

individual AEL levels were often 

inaccurately calculated. Other 

Committee members, however, felt that 

general use of the AEL is an acceptable 

method for allocating IHBG operating 

funds among the Indian tribes but that 

individual AEL determinations should 

be subject to challenge by individual 

Indian tribes. The Committee was 

unable to reach consensus on this issue 

and, therefore, a regulatory change was 

not contained in the February 25, 2005, 

proposed rule. HUD agreed to a study of 

the use of the AEL. This Indian housing 

cost study is currently underway. 

Twenty-nine commenters submitted 

comments regarding possible changes to 

the AEL, but were divided in their 

opinions. Some of the commenters were 

concerned about the failure of the 

Committee to find consensus on AEL 

and expressed support for changes 

through legislation or future regulatory 

changes. Others supported the 

continued use of AEL as an adjustment 

factor to account for the higher costs 

associated with differing geographic 

locations. 

Response: No change has been made 

to the rule in response to the comments. 

As noted, the Committee was unable to 

reach consensus on a proposed 

regulatory change and, therefore, did 

not adopt the commenters’ suggested 

change in this final rule. Accordingly, a 

revision to the AEL would not be 

appropriate at this final rule stage, since 

it would require additional notice and 

public comment. 

Comments regarding the use of multirace U.S. Census data. In calculating the 

Need component, pursuant to 

§ 1000.330, HUD uses U.S. Census 

population data. The 2000 U.S. Census 

reported for the first time both those 

persons who identify themselves solely 

as American Indian/Alaska Native 

(AIAN) and those who also identify 

with another race. HUD made the 

determination to use the 2000 Census 

data. HUD’s current calculation of the 

Need component incorporates all 

persons who identify as AIAN, without 

regard to whether they also identify as 

another race. During the negotiations for 

the proposed rule, proponents of using 

this data stated that the use of singlerace data does not reflect the best 

available information and would 

exclude some persons who identified as 

multi-race and are eligible to be served 

under NAHASDA. Other Committee 

members, however, expressed 

objections to the use of this multi-race 

data, stating that the purpose of 

NAHASDA, which is to assist Native 

Americans, would be better served by 

limiting the population data to those 

persons designating themselves as being 

solely AIAN. The Committee was 

unable to reach consensus on this issue 

and, therefore, a regulatory change was 

not contained in the February 25, 2005, 

proposed rule. Thirty-four commenters 

opposed the use of multi-race Census 

data and urged the Committee to revisit 

this issue. The tribes stated that the 

change to multi-race data has the effect 

of drastically increasing some tribes’

funding and decreasing that of others. In 

particular, one commenter wrote that 

the use of multi-race data would shift 

funding from traditional Native Villages 

to more urban areas. Several 

commenters suggested a compromise 

position providing for calculation of the 

Need component based on the average 

of individuals designating themselves 

solely as AIAN and the number of 

persons also designating themselves as 

belonging to other racial categories. One 

commenter suggested that tribal 

enrollment criteria should be used as 

the determining factor where eligibility 

is in question. Four commenters wrote 

in support of the multi-race Census 

data. One of these commenters stated 

that tribal members can be more than 

one race provided they meet the criteria 

established by the tribe. Two 


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commenters wrote that not using multirace data would result in undercounting 

of tribal membership. Another 

commenter offered general support for 

the use of multi-race Census data in the 

IHBG allocation formula. 

Response: The rule has not been 

revised in response to these comments. 

As discussed above, the Committee was 

unable to reach consensus on the issue 

of multi-race data and, therefore, a 

regulatory change at this final rule stage 

would be inappropriate without 

advance notice and the opportunity for 

public comment. Further, Senate Report 

109–109 accompanying the Fiscal Year 

2006 HUD Appropriations Act (Pub. L. 

109–115; approved November 30, 2005) 

provides for HUD to reassess, using 

notice and comment rulemaking 

procedures, its decision to use multirace data. Consistent with the language 

of the Senate Report, on December 12, 

2006, HUD published a notice in the 

Federal Register (71 FR 74748) that 

solicited public comment on the use of 

multi-race data in the computation of 

the IHBG allocation formula. 

IV. Findings and Certifications 

Regulatory Planning and Review 

The Office of Management and Budget 

(OMB) reviewed this rule under 

Executive Order 12866 (entitled 

‘‘Regulatory Planning and Review’’). 

OMB determined that this rule is a 

‘‘significant regulatory action’’ as 

defined in section 3(f) of the Order 

(although not an economically 

significant action, as provided under 

section 3(f)(1) of the Order). The docket 

file is available for public inspection in 

the Regulations Division, Office of 

General Counsel, Department of 

Housing and Urban Development, 451 

Seventh Street, SW., Room 10276, 

Washington, DC 20410–0500. Due to 

security measures at the HUD 

Headquarters building, please schedule 

an advance appointment to review the 

docket file by calling the Regulations 

Division at (202) 708–3055 (this is not 

a toll-free number). 

Paperwork Reduction Act 

The information collection 

requirements contained in this proposed 

rule have been approved by OMB under 

the Paperwork Reduction Act of 1995 

(44 U.S.C. 3501–3520) and assigned 

OMB control number 2577–0218. In 

accordance with the Paperwork 

Reduction Act, an agency may not 

conduct or sponsor, and a person is not 

required to respond to, a collection of 

information unless the collection 

displays a currently valid OMB control 

number. 

Environmental Impact 

A Finding of No Significant Impact 

(FONSI) with respect to the 

environment was made at the proposed 

rule stage in accordance with HUD 

regulations at 24 CFR part 50, which 

implement section 102(2)(C) of the 

National Environmental Policy Act of 

1969 (42 U.S.C. 4332(2)(C)). That FONSI 

remains applicable to this final rule and 

is available for public inspection 

between the hours of 8 a.m. and 5 p.m. 

weekdays in the Regulations Division, 

Office of General Counsel, Department 

of Housing and Urban Development, 

451 Seventh Street, SW., Room 10276, 

Washington, DC 20410–0500. Due to 

security measures at the HUD 

Headquarters building, please schedule 

an advance appointment to review the 

FONSI by calling the Regulations 

Division at (202) 708–3055 (this is not 

a toll-free number). 

Regulatory Flexibility Act 

The Regulatory Flexibility Act (5 

U.S.C. 601 et seq.) generally requires an 

agency to conduct a regulatory 

flexibility analysis of any rule subject to 

notice and comment rulemaking 

requirements, unless the agency certifies 

that the rule will not have a significant 

economic impact on a substantial 

number of small entities. This rule 

would not impose substantive new 

requirements on Indian tribes. Rather, 

the rule addresses those areas of the 

IHBG Formula that HUD and Indian 

tribal representatives determined 

require clarification, are outdated, or are 

not operating as intended. Moreover, 

HUD negotiated the amendments 

contained in this final rule with 

representatives of Indian tribes, and the 

rule reflects the consensus decisions 

reached by HUD and its tribal 

negotiating partners on the best way to 

address the required changes to the 

IHBG Formula. The potential burden of 

the regulatory changes on Indian tribes 

was considered and addressed as part of 

the negotiated rulemaking process. 

Accordingly, the undersigned certifies 

that this rule will not have a significant 

economic impact on a substantial 

number of small entities. 

Unfunded Mandates Reform Act 

Title II of the Unfunded Mandates 

Reform Act of 1995 (UMRA) (2 U.S.C. 

1531–1538) establishes requirements for 

federal agencies to assess the effects of 

their regulatory actions on state, local, 

and tribal governments and on the 

private sector. This rule does not 

impose any federal mandate on state, 

local, or tribal governments, or on the 

private sector within the meaning of 

UMRA. 

Catalog of Federal Domestic Assistance 

The Catalog of Federal Domestic 

Assistance number for the IHBG 

program is 14.867. 

List of Subjects in 24 CFR Part 1000 

Aged, Grant programs—housing and 

community development, Grant 

programs—Indians, Individuals with 

disabilities, Low and moderate income 

housing, Public housing, Reporting and 

recordkeeping requirements. 

■ Accordingly, for reasons discussed in 

the preamble, HUD amends 24 CFR part 

1000 as follows: 

PART 1000—NATIVE AMERICAN 

HOUSING ACTIVITIES 

■ 1. The authority citation for 24 CFR 

part 1000 continues to read as follows: 

Authority: 25 U.S.C. 4101 et seq.; 42 U.S.C. 

3535(d). 

■ 2. In § 1000.302, revise the definition 

of ‘‘Formula Area’’ and add, in 

alphabetical order, definitions of the 

terms ‘‘National Per Unit Subsidy’’ and 

‘‘Substantial Housing Services’’ to read 

as follows: 

§ 1000.302 What are the definitions 

applicable to the IHBG formula? 

* * * * * 

Formula area. (1) Formula areas are: 

(i) Reservations for federally 

recognized Indian tribes, as defined by 

the U.S. Census; 

(ii) Trust lands; 

(iii) Department of the Interior NearReservation Service Areas; 

(iv) Former Indian Reservation Areas 

in Oklahoma Indian Areas, as defined 

by the U.S. Census as Oklahoma Tribal 

Statistical Areas (OTSAs); 

(v) Congressionally Mandated Service 

Areas; 

(vi) State Tribal Areas as defined by 

the U.S. Census as State Designated 

American Indian Statistical Areas 

(SDAISAs); 

(vii) Tribal Designated Statistical 

Areas (TDSAs); 

(viii) California Tribal Jurisdictional 

Areas established or reestablished by 

federal court judgment; and 

(ix) Alaska formula areas described in 

paragraph (4) of this definition. 

(2)(i) For a geographic area not 

identified in paragraph (1) of this 

definition, and for expansion or redefinition of a geographic area from the 

prior year, including those identified in 

paragraph (1) of this definition, the 

Indian tribe must submit, on a form 

agreed to by HUD, information about the 

geographic area it wishes to include in 


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its Formula Area, including proof that 

the Indian tribe, where applicable, has 

agreed to provide housing services 

pursuant to a Memorandum of 

Agreement (MOA) with the tribal and 

public governing entity or entities of the 

area, or has attempted to establish such 

an MOA; and either: 

(A) Could exercise court jurisdiction; 

or 

(B) Is providing substantial housing 

services and will continue to expend or 

obligate funds for substantial housing 

services, as reflected in the form agreed 

to by HUD for this purpose. 

(ii) Upon receiving a request for 

recognition of a geographic area not 

identified in paragraph (1) of this 

definition, HUD shall make a 

preliminary determination. HUD shall 

notify all potentially affected Indian 

tribes of the basis for its preliminary 

determination by certified mail and 

provide the Indian tribes with the 

opportunity to comment for a period of 

not less than 90 days. After 

consideration of the comments, HUD 

shall announce its final determination 

through Federal Register notice. 

(iii) No Indian tribe may expand or 

redefine its Formula Area without 

complying with the requirements of 

paragraphs (2)(i) and (ii) of this 

definition, notwithstanding any changes 

recognized by the U.S. Census Bureau. 

(iv) The geographic area into which 

an Indian tribe may expand under this 

paragraph (2) shall be the smallest U.S. 

Census unit or units encompassing the 

physical location where substantial 

housing services have been provided by 

the Indian tribe. 

(3) Subject to a challenge by an Indian 

tribe with a Formula Area described 

under paragraph (1)(iv) of this 

definition, any federally recognized 

Indian tribe assigned Formula Area 

geography in Fiscal Year 2003 not 

identified in paragraphs (1) and (2) of 

this definition, shall continue to be 

assigned such Formula Area in 

subsequent fiscal years, provided that 

the Indian tribe continues to provide an 

appropriate level of housing services 

within the Formula Area as monitored 

by HUD using the definition of 

substantial housing services contained 

in this section as a guideline but not as 

a requirement. 

(4) Notwithstanding paragraphs (1), 

(2), and (3) of this definition, Alaska 

needs data shall be credited as set forth 

in § 1000.327 to the Alaska Native 

Village (ANV), the regional Indian tribe, 

or to the regional corporation 

established pursuant to the Alaska 

Native Claims Settlement Act (33 U.S.C. 

1601 et seq.) (ANCSA). For purposes of 

§ 1000.327 and this definition: 

(i) The formula area of the ANV shall 

be the geographic area of the village or 

that area delineated by the TDSA 

established for the ANV for purposes of 

the 1990 U.S. Census or the Alaska 

Native Village Statistical Area (ANVSA) 

established for the ANV. To the extent 

that the area encompassed by such 

designation may substantially exceed 

the actual geographic area of the village, 

such designation is subject to challenge 

pursuant to § 1000.336. If the ANVSA or 

the TDSA is determined pursuant to 

such challenge to substantially exceed 

the actual area of the village, then the 

geographic formula area of the ANV for 

purposes of § 1000.327 shall be such 

U.S. Census designation as most closely 

approximates the actual geographic area 

of the village. 

(ii) The geographic formula area of the 

regional corporation shall be the area 

established for the corporation by the 

ANCSA. 

(iii) An Indian tribe may seek to 

expand its Alaska formula area within 

its ANCSA region pursuant to the 

procedures set out in paragraph (2) of 

this definition. Formula Area added in 

this way shall be treated as overlapping 

pursuant to § 1000.326, unless the 

Indian tribe’s members in the expanded 

area are less than 50 percent of the 

AIAN population. In cases where the 

Indian tribe is not treated as 

overlapping, the Indian tribe shall be 

credited with population and housing 

data only for its own tribal member 

residents within the new or added area. 

All other population and housing data 

for the area shall remain with the Indian 

tribe or tribes previously credited with 

such data. 

(5) In some cases the population data 

for an Indian tribe within its Formula 

Area is greater than its tribal enrollment. 

In general, to maintain fairness for all 

Indian tribes, the tribe’s population data 

will not be allowed to exceed twice an 

Indian tribe’s enrolled population. 

However, an Indian tribe subject to this 

cap may receive an allocation based on 

more than twice its total enrollment if 

it can show that it is providing housing 

assistance to substantially more nonmember Indians and Alaska Natives 

who are members of another federally 

recognized Indian tribe than it is to 

members. For state-recognized Indian 

tribes, the population data and formula 

allocation shall be limited to their tribal 

enrollment figures as determined under 

enrollment criteria in effect in 1996. 

(6) In cases where an Indian tribe is 

seeking to receive an allocation more 

than twice its total enrollment, the tribal 

enrollment multiplier will be 

determined by the total number of 

Indians and Alaska Natives to whom the 

Indian tribe is providing housing 

assistance (on July 30 of the year before 

funding is sought) divided by the 

number of members to whom the Indian 

tribe is providing housing assistance. 

For example, an Indian tribe that 

provides housing to 300 Indians and 

Alaska Natives, of which 100 are 

members, the Indian tribe would then 

be able to receive an allocation for up 

to three times its tribal enrollment if the 

Indian and Alaska Native population in 

the area is three or more times the tribal 

enrollment. 

* * * * * 

National per unit subsidy is the Fiscal 

Year 1996 national per unit subsidy 

(adjusted to full funding level) 

multiplied by an adjustment factor for 

inflation. 

* * * * * 

Substantial housing services are: 

(1) Affordable housing activities 

funded from any source provided to 

AIAN households with incomes 80 

percent of the median income as 

defined in NAHASDA (25 U.S.C. 4103 

(14)) or lower, equivalent to 100 percent 

or more of the increase in the IHBG 

formula allocation that the Indian tribe 

would receive as a result of adding the 

proposed geography; or 

(2) Affordable housing activities 

funded with IHBG funds provided to 

AIAN households with incomes 80 

percent of the median income as 

defined in NAHASDA (25 U.S.C. 

4104(14)) or lower, equivalent to 51 

percent or more of the Indian tribe’s 

current total IHBG grant; and either: 

(i) Fifty-one percent or more of the 

Indian tribe’s official enrollment resides 

within the geographic area; or 

(ii) The Indian tribe’s official 

enrollment constitutes 51 percent or 

more of the total AIAN persons within 

the geography. 

(3) HUD shall require that the Indian 

tribe annually provide written 

verification, on a form approved by 

HUD, that the affordable housing 

activities it is providing meet the 

definition of substantial housing 

services. 

* * * * * 

■ 3. Revise § 1000.306(b) to read as 

follows: 

§ 1000.306 How can the IHBG Formula be 

modified? 

* * * * * 

(b) The IHBG Formula shall be 

reviewed not later than May 21, 2012 to 

determine if a subsidy is needed to 

operate and maintain NAHASDA units 

or if any other changes are needed in 

respect to funding under the Formula 


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Current Assisted Stock component of 

the formula. 

* * * * * 

■ 4. Add § 1000.315 to read as follows: 

§ 1000.315 Is a recipient required to report 

changes to the Formula Current Assisted 

Stock (FCAS) on the Formula Response 

Form? 

(a) A recipient shall report changes to 

information related to the IHBG formula 

on the Formula Response Form, 

including corrections to the number of 

Formula Current Assisted Stock (FCAS), 

during the time period required by 

HUD. This time period shall be not less 

than 60 days from the date of the HUD 

letter transmitting the form to the 

recipient. 

(b) The Formula Response Form is the 

only mechanism that a recipient shall 

use to report changes to the number of 

FCAS. 

■ 5. In § 1000.316, revise paragraphs 

(a)(1), (a)(2), and (a)(3) and paragraph (b) 

to read as follows: 

§ 1000.316 How is the Formula Current 

Assisted Stock (FCAS) Component 

developed? 

* * * * * 

(a) * * * 

(1) The number of low-rent FCAS 

units multiplied by the national per unit 

subsidy; 

(2) The number of Section 8 units 

whose contract has expired but had 

been under contract on September 30, 

1997, multiplied by the FY 1996 

national per unit subsidy; and 

(3) The number of Mutual Help and 

Turnkey III FCAS units multiplied by 

the national per unit subsidy. 

(b) Modernization allocation. (1) For 

Indian tribes with an Indian Housing 

Authority that owned or operated 250 or 

more public housing units on October 1, 

1997, the modernization allocation 

equals the number of Low Rent, Mutual 

Help, and Turnkey III FCAS units 

multiplied by the national per-unit 

amount of allocation for FY 1996 

modernization multiplied by an 

adjustment factor for inflation. 

(2) For Indian tribes with an Indian 

Housing Authority that owned or 

operated fewer than 250 public housing 

units on October 1, 1997, the 

modernization allocation equals the 

average amount of funds received under 

the assistance program authorized by 

section 14 of the 1937 Act (not 

including funds provided as emergency 

assistance) for FYs 1992 through 1997. 

■ 6. Add § 1000.319 to read as follows: 

§ 1000.319 What would happen if a 

recipient misreports or fails to correct 

Formula Current Assisted Stock (FCAS) 

information on the Formula Response 

Form? 

(a) A recipient is responsible for 

verifying and reporting changes to their 

Formula Current Assisted Stock (FCAS) 

on the Formula Response Form to 

ensure that data used for the IHBG 

Formula are accurate (see § 1000.315). 

Reporting shall be completed in 

accordance with requirements in this 

Subpart D and the Formula Response 

Form. 

(b) If a recipient receives an 

overpayment of funds because it failed 

to report such changes on the Formula 

Response Form in a timely manner, the 

recipient shall be required to repay the 

funds within 5 fiscal years. HUD shall 

subsequently distribute the funds to all 

Indian tribes in accordance with the 

next IHBG Formula allocation. 

(c) A recipient will not be provided 

back funding for any units that the 

recipient failed to report on the Formula 

Response Form in a timely manner. 

(d) HUD shall have 3 years from the 

date a Formula Response Form is sent 

out to take action against any recipient 

that fails to correct or make appropriate 

changes on that Formula Response 

Form. Review of FCAS will be 

accomplished by HUD as a component 

of A–133 audits, routine monitoring, 

FCAS target monitoring, or other 

reviews. 

■ 7. Revise § 1000.326(b) to read as 

follows: 

§ 1000.326 What if a formula area is served 

by more than one Indian tribe? 

* * * * * 

(b) Tribal membership in the 

geographic area (not to include dually 

enrolled tribal members) will be based 

on data that all Indian tribes involved 

agree to use. Suggested data sources 

include tribal enrollment lists, the U.S. 

Census, Indian Health Service User 

Data, and Bureau of Indian Affairs data. 

* * * * * 

■ 8. Revise § 1000.328 to read as 

follows: 

§ 1000.328 What is the minimum amount 

that an Indian tribe may receive under the 

need component of the formula? 

(a) Subject to the eligibility criteria 

described in paragraph (b) of this 

section, the minimum allocation in any 

fiscal year to an Indian tribe under the 

need component of the IHBG Formula 

shall equal 0.007826 percent of the 

available appropriations for that fiscal 

year after set asides. 

(b) To be eligible for the minimum 

allocation described in paragraph (a) of 

this section, an Indian tribe must: 

(1) Receive less than $200,000 under 

the FCAS component of the IHBG 

Formula for the fiscal year; and 

(2) Demonstrate the presence of any 

households at or below 80 percent of 

median income. 

■ 9. In § 1000.330, revise the heading 

and designate the existing text of 

paragraph (a) and add new paragraphs 

(b) and (c) to read as follows: 

§ 1000.330 What are the data sources for 

the need variables? 

* * * * * 

(b) The data for the need variables 

shall be adjusted annually beginning the 

year after the need data is collected, 

using Indian Health Service projections 

based upon birth and death rate data as 

provided by the National Center for 

Health Statistics. 

(c) Indian tribes may challenge the 

data described in paragraphs (a) and (b) 

of this section pursuant to § 1000.336. 

■ 10. Revise § 1000.336 to read as 

follows: 

§ 1000.336 How may an Indian tribe, TDHE, 

or HUD challenge data or appeal HUD 

formula determinations? 

(a) An Indian tribe, TDHE, or HUD 

may challenge data used in the IHBG 

Formula and HUD formula 

determinations regarding: 

(1) U.S. Census data; 

(2) Tribal enrollment; 

(3) Formula area; 

(4) Formula Current Assisted Stock 

(FCAS); 

(5) Total Development Cost (TDC); 

(6) Fair Market Rents (FMRs); and 

(7) Indian Health Service projections 

based upon birth and death rate data 

provided by the National Center for 

Health Statistics. 

(b) An Indian tribe or TDHE may not 

challenge data or HUD formula 

determinations regarding Allowable 

Expense Level (AEL) and the inflation 

factor. 

(c) The challenge and the collection of 

data and the appeal of HUD formula 

determinations is an allowable cost for 

IHBG funds. 

(d) An Indian tribe or TDHE that seeks 

to appeal data or a HUD formula 

determination, and has data in its 

possession that are acceptable to HUD, 

may submit the data and proper 

documentation to HUD. Data used to 

challenge data contained in the U.S. 

Census must meet the requirements 

described in § 1000.330(a). Further, in 

order for a census challenge to be 

considered for the upcoming fiscal year 

allocation, documentation must be 

submitted by March 30th. 


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(e) HUD shall respond to all 

challenges or appeals not later than 45 

days after receipt and either approve or 

deny the validity of such data or 

challenge to a HUD formula 

determination in writing, setting forth 

the reasons for its decision. Pursuant to 

HUD’s action, the following shall apply: 

(1) In the event HUD challenges the 

validity of the submitted data, the 

Indian tribe or TDHE and HUD shall 

attempt in good faith to resolve any 

discrepancies so that such data may be 

included in the formula allocation. 

(2) Should the Indian tribe or TDHE 

and HUD be unable to resolve any 

discrepancy within 30 calendar days of 

receipt of HUD’s denial, the Indian tribe 

or TDHE may request reconsideration of 

HUD’s denial in writing. The request 

shall set forth justification for 

reconsideration. 

(3) Within 20 calendar days of 

receiving the request, HUD shall 

reconsider the Indian tribe or TDHE’s 

submission and either affirm or reverse 

its initial decision in writing, setting 

forth HUD’s reasons for the decision. 

(4) Pursuant to resolution of the 

dispute: 

(i) If the Indian tribe or TDHE 

prevails, an adjustment to the Indian 

tribe’s or TDHE’s subsequent allocation 

for the subsequent year shall be made 

retroactive to include only the disputed 

fiscal year(s); or 

(ii) If HUD prevails, it shall issue a 

written decision denying the Indian 

tribe or TDHE’s petition for 

reconsideration, which shall constitute 

final agency action. 

(f) In the event HUD questions that 

the data contained in the formula does 

not accurately represent the Indian 

tribe’s need, HUD shall request the 

Indian tribe to submit supporting 

documentation to justify the data and to 

provide a commitment to serve the 

population indicated in the geographic 

area. 

■ 11. Revise § 1000.340 to read as 

follows: 

§ 1000.340 What if an Indian tribe is 

allocated less funding under the IHBG 

Formula than it received in Fiscal Year (FY) 

1996 for operating subsidy and 

modernization? 

(a) If an Indian tribe is allocated less 

funding under the modernization 

allocation of the formula pursuant to 

§ 1000.316(b)(2) than the calculation of 

the number of Low Rent, Mutual Help, 

and Turnkey III FCAS units multiplied 

by the national per-unit amount of 

allocation for FY 1996 modernization 

multiplied by an adjustment factor for 

inflation, the Indian tribe’s 

modernization allocation is calculated 

under § 1000.316(b)(1). The remaining 

grants are adjusted to keep the 

allocation within available 

appropriations. 

(b) If an Indian tribe is allocated less 

funding under the formula than an IHA 

received on its behalf in FY 1996 for 

operating subsidy and modernization, 

its grant is increased to the amount 

received in FY 1996 for operating 

subsidy and modernization. The 

remaining grants are adjusted to keep 

the allocation within available 

appropriations. 

■ 12. Revise Appendices A and B to part 

1000 to read as follows: 

APPENDIX A TO PART 1000—INDIAN 

HOUSING BLOCK GRANT FORMULA 

MECHANICS 

This appendix shows the different 

components of the IHBG formula. The 

following text explains how each component 

of the IHBG formula is calculated. 

1. The Indian Housing Block Grant (IHBG) 

formula is calculated by initially determining 

the amount a tribe receives for Formula 

Current Assisted Stock (FCAS) (See 

§§ 1000.310 and 1000.312). FCAS funding is 

comprised of two components, Operating 

subsidy (§ 1000.316(a)) and Modernization 

(§ 1000.316(b)). 

2. The operating subsidy component is 

calculated based on the national per unit 

subsidy (§ 1000.302 National Per Unit 

Subsidy) for operations for each of the 

following types of programs—Low Rent, 

Homeownership (Mutual Help and Turnkey 

III), and Section 8. A tribe’s total count of 

units in each of the above categories is 

multiplied by the relevant national per unit 

subsidy. That amount is summed and 

multiplied by a local area cost adjustment 

factor for management. 

3. The local area cost adjustment factor for 

management is called AELFMR. AELFMR is 

the greater of a tribe’s Allowable Expense 

Level (AEL) or Fair Market Rent (FMR) factor, 

where the AEL and FMR factors are 

determined by dividing each tribe’s AEL and 

FMR by their respective national weighted 

average (weighted on the unadjusted 

allocation under FCAS operating subsidy). 

The adjustment made to the FCAS 

component of the IHBG formula is then the 

new AELFMR factor divided by the national 

weighted average of the AELFMR (See 

§ 1000.320). 

4. The Modernization component is 

determined using two methods depending on 

the number of public housing units that a 

tribe’s housing authority operated prior to 

NAHASDA. 

(a) For Indian tribes with an Indian 

housing authority (IHA) that owned or 

operated 250 or more public housing units on 

October 1, 1997, the modernization 

allocation equals the number of Low Rent, 

Mutual Help, and Turnkey III FCAS units 

multiplied by the national per-unit amount of 

allocation for FY 1996 modernization 

multiplied by an adjustment factor for 

inflation (See § 1000.316(b)(1)). 

(b) For Indian tribes with an IHA that 

owned or operated fewer than 250 units on 

October 1, 1997, the modernization 

allocation equals the average amount of 

funds received under the assistance program 

authorized by section 14 of the 1937 Act (not 

including funds provided as emergency 

assistance) for FYs 1992 through 1997 (See 

§ 1000.316(b)(2)). 

(c) The modernization amount is then 

multiplied times a local area cost adjustment 

factor for construction, the TDC. The 

construction adjustment factor is the TDC for 

the area divided by the weighted national 

average for TDC (weighted on the unadjusted 

allocation for modernization (See 

§ 1000.320). 

5. After determining the total amount 

allocated under FCAS for each tribe, it is 

summed for every tribe. The national total 

amount for FCAS is subtracted from the 

remaining available funds to determine the 

total amount to be allocated under the Need 

component of the IHBG formula. 

6. The Need component of the IHBG 

formula is calculated using seven factors 

using data from sources defined in 

§ 1000.330 weighted as set forth in 

§ 1000.324 as follows: 22 percent of the 

allocated funds will be allocated by a tribe’s 

share of the total Native American 

households paying more than 50 percent of 

their income for housing and living in the 

Indian tribe’s formula area, 25 percent of the 

funds allocated under Need will be allocated 

by a tribe’s share of the total Native American 

households overcrowded and/or without 

kitchen or plumbing living in their formula 

area, and so on. The current national totals 

for each of the need variables will be 

distributed annually by HUD with the 

Formula Response Form (See § 1000.332). 

The national totals will change as tribes 

update information about their formula area 

and data for individual areas are challenged 

(See §§ 1000.334 and 1000.336). The Need 

component is then calculated by multiplying 

a tribe’s share of housing need by a local area 

cost adjustment factor for construction (the 

TDC) (See § 1000.338). 

7. Tribes that receive less than $200,000 

under the FCAS component of the IHBG 

formula and that can demonstrate the 

presence of any households at or below 80 

percent of median income are guaranteed to 

receive no less than a specified minimum 

under the Needs component of the formula. 

The specified minimum amount shall equal 

.007826 percent of the available 

appropriations for that FY after set asides. 

The increase in funding for the tribes 

receiving the minimum need amount is 

funded by a reallocation from other tribes 

whose needs allocation exceeds the 

minimum need amount. This is necessary in 

order to keep the total allocation within the 

appropriation level (See § 1000.328). 

8. A tribe’s preliminary grant is calculated 

by summing the FCAS and Need allocations. 

This amount is subject to two final 

adjustments: 

(a) If an Indian tribe with an IHA that 

owned or operated fewer than 250 units on 

October 1, 1997, is allocated less funding 

under the averaging method 

(§ 1000.316(b)(2)) than the calculation of the 

number of Low Rent, Mutual Help, and 

Turnkey III FCAS multiplied by the national 


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Federal Register / Vol. 72, No. 76 / Friday, April 20, 2007 / Rules and Regulations 20027 

per-unit amount of allocation for FY 1996 

modernization multiplied by an adjustment 

factor for inflation, the Indian tribe’s 

modernization allocation is calculated under 

§ 1000.316(b)(1). The grants of all other tribes 

are proportionately adjusted to keep the 

allocation within available appropriations. 

(b) Next, this preliminary grant is 

compared to how much a tribe received in 

FY 1996 for operating subsidy and 

modernization. If a tribe received more in FY 

1996 for operating subsidy and 

modernization than it does under the IHBG 

formula allocation, its grant is adjusted up to 

the FY 1996 level (See § 1000.340(b)). Indian 

tribes receiving more under the IHBG 

formula than in FY 1996 ‘‘pay’’ for the 

upward adjustment for the other tribes by 

having their own grants adjusted downward. 

Because many more Indian tribes have grant 

amounts above the FY 1996 level than those 

with grants below the FY 1996 level, each 

tribe contributes very little, relative to their 

total grant, to fund the adjustment. 

Appendix B to Part 1000—IHBG Block 

Grant Formula Mechanisms 

1. The Indian Housing Block Grant (IHBG) 

formula consists of two components, the 

Formula Current Assisted Stock (FCAS) and 

Need. Therefore, the formula allocation 

before adjusting for the statutory requirement 

that a tribe’s minimum grant will not be less 

than the tribe’s Fiscal Year (FY) 1996 

Operating Subsidy and Modernization 

funding, can be represented by: 

unadjGRANT = FCAS + NEED. 

2. NAHASDA requires that the FCAS be 

provided for before allocating funds based on 

need. Therefore, FCAS must be calculated 

first. FCAS consists of two components, 

Operating Subsidy (OPSUB) and 

Modernization (MOD), such that: 

FCAS = OPSUB + MOD. 

3. OPSUB consists of three main parts: 

number of Low-Rent units; number of 

Section 8 units; and number of Mutual Help 

and Turnkey III units. Each of these main 

parts are adjusted by the national per unit 

subsidy (§ 1000.302 National Per Unit 

Subsidy) and local area costs as reflected by 

the greater of the AEL factor or FMR factor. 

The AEL factor is defined in § 1000.302 as 

the relative difference between a local area 

Allowable Expense Level (AEL) and the 

national weighted average for AEL (NAEL). 

The FMR factor is also defined in § 1000.302 

as the relative difference between a local area 

Fair Market Rent (FMR) and the national 

weighted average for FMR. 

OPSUB = [LR * LRSUB + (MH+TK) * HOSUB 

+ S8 * S8SUB ] * AELFMR 

Where: 

LR = number of Low-Rent units. 

LRSUB = national per unit subsidy for LowRent units ($2,440*INF). 

MH+TK = number of Mutual Help and 

Turnkey III units. 

HOSUB = national per unit subsidy for 

Homeownership units ($528*INF). 

S8 = number of Section 8 units. 

S8SUB = national per unit subsidy for 

Section 8 units = ($3,625*INF). 

AELFMR = greater of AEL Factor or FMR 

Factor weighted by national average of 

AEL Factor and FRM Factor. 

AEL FACTOR = AEL/NAEL. 

AEL = local Allowable Expense Level. 

NAEL = national weighted average for AEL. 

FMR FACTOR = FMR/NFMR. 

FMR = local Fair Market Rent. 

NFMR = national weighted average for FMR. 

NAELFMR = national weighted average for 

greater of AEL Factor or FMR factor. 

Where: 

INF = adjustment for inflation since 1995, as 

determined by the Consumer Price Index 

for housing. 

4. The modernization component, MOD, is 

calculated by two different methods, 

depending on whether the tribe had an 

Indian housing authority (IHA) that owned or 

operated more than 250 public housing units 

on October 1, 1997. 

a. MOD1996 is calculated for all tribes and 

considers the number of Low-Rent, and 

Mutual Help and Turnkey III FCAS units. 

Each of these is adjusted by the national perunit modernization amount in 1996 adjusted 

for inflation. 

MOD1996 = [LR + MH+TK] *MODPU *INF. 

Where: 

LR = number of Low-Rent units. 

MH = number of Mutual Help units. 

TK = number of Turnkey III units. 

MODPU = national per-unit amount for 

modernization in 1996 ($1,974). 

INF = adjustment for inflation since 1995, as 

determined by the Consumer Price Index 

for housing. 

b. MODAVG is calculated only for tribes 

that had an IHA that owned or operated 

fewer than 250 public housing units on 

October 1, 1997, as the annual average 

amount they received for FYs 1992 through 

1997 under the assistance program 

authorized by section 14 of the 1937 Act (not 

including emergency assistance). 

MODAVG = Average (FY 1992 to FY 1997) 

amount received by Section 14 of the 

1937 Act. 

c. For Indian tribes with an IHA that 

owned or operated 250 or more public 

housing units on October 1, 1997, the 

modernization calculation is based on 

MOD1996, adjusted for local area costs: 

MOD = MOD1996* TDC/NTDC. 

Where: 

TDC = Local Total Development Costs 

defined in § 1000.302. 

NTDC = weighted national average for TDC 

of tribes with CAS. 

d. For Indian tribes with an IHA that 

owned or operated fewer than 250 units on 

October 1, 1997, the modernization 

calculation is based on MODAVG, adjusted 

for local area costs. 

MOD = MODAVG* TDC/NTDC. 

5. Now that calculation for FCAS is 

complete, funds available for allocation using 

the Need component of the formula can be 

determined: 

NEED FUNDS = APPROPRIATION ¥ 

NATCAS. 

Where: 

APPROPRIATION = dollars provided for 

distribution through the IHBG formula. 

NATCAS = National summation of FCAS 

allocation for all tribes. 

6. Two iterations are necessary to compute 

the final Need allocation. The first iteration 

consists of seven weighted criteria that 

allocate need funds based on a tribe’s 

population and housing data. This allocation 

is then adjusted for local area cost differences 

based on TDC relative to the national 

weighted average. This can be represented 

by: 

NEED1 = [(0.11 * PER / NPER) + (0.13 * 

HHLE30 / NHHLE30) + (0.07 * HH30T50 

/ NHH30T50) + (0.07 * HH50T80 / 

NHH50T80) + (0.25 * OCRPR / NOCRPR) 

+ (0.22 * SCBTOT / NSCBTOT) + (0.15 

* HOUSHOR / NHOUSHOR)] * NEED 

FUNDS * (TDC/NATDC). 

Where: 

PER = American Indian and Alaskan Native 

(AIAN) persons. 

NPER = national total of PER. 

HHLE30 = AIAN households less than 30% 

of median income. 

NHHLE30 = national total of HHLE30. 

HH30T50 = AIAN households 30% to 50% 

of median income. 

NHH30T50 = national total of HH30T50. 

HH50T80 = AIAN households 50% to 80% 

of median income. 

NHH50T80 = national total of HH50T80. 

OCRPR = AIAN households crowded or 

without complete kitchen or plumbing. 

NOCRPR = national total of OCRPR. 

SCBTOT = AIAN households paying more 

than 50% of their income for housing. 

NSCBTOT = national total SCBTOT. 

HOUSHOR = AIAN households with an 

annual income less than or equal to 80% 

of formula median income reduced by 

the combination of current assisted stock 

and units developed under NAHASDA. 

NHOUSHOR = national total of HOUSHOR. 

TDC = Local Total Development Costs 

defined in § 1000.302. 

NATDC = weighted national average for TDC 

of tribes with need. 

7. The second iteration in computing the 

Need allocation consists of adjusting the 

Need allocation computed above to take into 

account the minimum needs provision. 

Tribes that receive less than $200,000 under 

the FCAS component of the IHBG formula 

and that can demonstrate the presence of any 

households at or below 80 percent of median 

income are guaranteed to receive no less than 

a specified minimum amount under the 

Needs component of the formula. The 

specified minimum amount shall equal 

.007826 percent of the available 

appropriations for that fiscal year after set 

asides. 

MINFUNDING = APPROPRIATION* 

.00007826 

If in the first Need computation, a qualified 

tribe is allocated less than the minimum 

Needs funding level, its Need allocation will 

go up. Other tribes whose Needs allocations 

are greater than the minimum needs amount 

will have their allocations adjusted 

downward to keep the total allocation within 

available funds: 


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20028 Federal Register / Vol. 72, No. 76 / Friday, April 20, 2007 / Rules and Regulations 

If NEED1 < MINFUNDING and FCAS < 

$200,000 and (HHLE30 + HH30T50 + 

HH50T80) > 0, then NEED 2 = 

MINFUNDING. 

If NEED1 > = MINFUNDING, then NEED2 = 

NEED1 ¥ {UNDERMIN$ * [(NEED1 ¥ 

MINFUNDING) / OVERMIN$]}. 

Where: 

MINFUNDING = minimum needs amount 

UNDERMIN$ = for all tribes qualifying for an 

increase under the minimum needs 

provision, sum of the differences 

between MINFUNDING and NEED1. 

OVERMIN$ = for all tribes with needs 

allocations larger than the minimum 

needs amount, the sum of the difference 

between NEED1 and MINFUNDING. 

8. The next step is to compute a 

preliminary unadjusted grant allocation 

(unadjGRANT) that will serve as the basis for 

further adjustments called for in § 1000.340. 

unadjGRANT = FCAS + NEED, where both 

FCAS and NEED are calculated above. 

9. As required by § 1000.340(a), if an 

Indian tribe with an IHA that owned or 

operated fewer than 250 units on October 1, 

1997, is allocated less funding under the 

averaging method (§ 1000.316(b)(2)) than the 

calculation of the number of Low-Rent, 

Mutual Help, and Turnkey III FCAS is 

multiplied by the national per-unit amount of 

allocation for FY 1996 modernization 

multiplied by an adjustment factor for 

inflation, then, the Indian tribe’s 

modernization allocation is calculated under 

§ 1000.316(b)(1). The grants of all other tribes 

are proportionately adjusted to keep the 

allocation within available appropriations. 

If MODAVG < MOD1996, 

then GRANT1 = unadjGRANT + 

(MOD1996*(TDC/NTDC)) ¥ (MODAVG* 

(TDC/NTDC)). 

Otherwise, 

GRANT1 = unadjGRANT ¥ [UNDERMOD$ * 

(unadjGRANT / OVERMODGRANT$)] 

Where: 

UNDERMOD$ = for all tribes qualifying for 

an increase to modernization, the sum of 

the differences between local cost 

adjusted MOD1996 and local cost 

adjusted MODAVG. 

OVERMODGRANT$ = for all tribes not 

qualifying for an increase to 

modernization, the sum of their 

unadjusted grant amounts. 

10. As called for in § 1000.340(b), a final 

adjustment occurs to ensure that no tribe is 

allocated less funding under the formula than 

an IHA received on its behalf in FY 1996 for 

operating subsidy and modernization. Indian 

tribes receiving more under the IHBG 

formula than in FY 1996 ‘‘pay’’ for the 

upward adjustment for the other tribes by 

having their grants adjusted downward, so 

long as the adjustment does not reduce their 

grant below the minimum funding amount. 

Let TEST = GRANT1 ¥ OPMOD96. 

If TEST is less than 0, then GRANT2 = 

OPMOD96. 

If TEST is greater than 0 and GRANT1 > 

MINFUNDING, then GRANT2 = 

GRANT1 ¥ [UNDER1996 * (TEST / 

OVER1996)]. 

Where: 

OPMOD96 = funding received by tribe in FY 

1996 for Operating Subsidy and 

Modernization. 

UNDER1996 = for all tribes with TEST less 

than 0, sum of the absolute value of 

TEST. 

OVER1996 = for all tribes with TEST greater 

than 0, sum of TEST. 

GRANT2 is the approximate grant amount in 

any given year for any given tribe. 

Dated: April 12, 2007. 

Paula O. Blunt, 

General Deputy Assistant Secretary for Public 

and Indian Housing. 

[FR Doc. E7–7470 Filed 4–19–07; 8:45 am] 

BILLING CODE 4210–67–P 


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